ipCG Blog

Managing Ideas, Inventions, & IP.

It's been two decades since Intellectual Property (IP) and its development became a defining element in investment strategies for parties on both sides of the negotiation table. In the late 1990's, investors wanted their dot-com startup companies to have patents, as it would help the company appear innovative. Even after the dot-coms went bust, investors regarded IP as upside protection; meaning, if the company went under, the IP portion of the portfolio could keep the deal from being a complete loss. Investors, like Venture Capitalists (VCs), who got burned by multiple failed investment efforts, turned their interest towards start-up companies with a strong balance sheet versus those with no revenue potential. For example, if pre-investment research showed that the start-up had a Freedom to Operate (FTO), then IP became a more important consideration on an investor's check list.

The battle over CRISPR (Clustered regularly-interspaced short palindromic repeats) patents highlights the importance of having a sound patent strategy before filing the first disclosure. The University of California v. Broad Institute, Inc. is an excellent example of the difference a well-executed strategy can make.

When deciding where to file patents, that is, what other countries should a patent be filed in other than the inventor's home country, there are important considerations that need to be evaluate and weighed against each other. This creates a "foreign filings decision matrix" approach. Here are some of the considerations that might help create a "foreign filings decision matrix." Simply list the countries in columns and these considerations as rows and put a high, medium or low at each intersection to create an evaluation matrix.

Artificial Intelligence (AI) goes back to the 1950’s, as defined by Minsky & McCarthy, to be “any task performed by a program or a machine that, if a human carried out the same activity, we would say the human had to apply intelligence to accomplish the task”. This being the case, a lot has happened in almost 70 years since that statement. The history of AI can be easily researched; however, a reasonable definition can also be extracted from examples of how AI is being used and what AI is being used for.

The day has come where large innovation labs built by companies may not be needed. Why spend hundreds of millions to billions of dollars on a physical structure, staffed with creative people and equipped with the best tools, when this all can be virtualized? In this context, "Virtualized" does not mean remote workers, but taking the innovation process and virtualizing it with AI tools and specialized, data analytic capability and inventors. These inventors don't even have to have domain knowledge, as experts can be hired by the hour from the crowd.

An enlightened IT director needs to see that AI will be a huge cost savings and quality boost to the organization, and needs to guide the AI app developers, all while maintaining the security and robustness of the existing enterprise software and database. That is a larger skill set than most IT directors may have. But, to thrive in the new world of AI, the IT director should not use the security and robustness of the existing enterprise software and database as a blockade to innovation. The IT director must now play a more innovative role him/herself.

For many years, those working at licensing and patent sales for hundreds of buyers and sellers have always realized that "telling the story" was essential. An industry standard, if not the industry standard, was a 2-pager flyer with sections on Business, Market, Technology, Valuation, and Claims Charting, etc. to create interest and then leads. Buyers or licensees had their own information requirements, but it always came down to the overlap of interest and good patents. New in the industry is a video of the IP to be sold or licensed. Seems like most people will open a 3-4 minute video but will not read a 2 page or longer package to get interest. But what is the formula for the marketing video: actors, sets, music; what do IP brokers now have to do?

In the last blog post, the basic types of intellectual property (IP) were discussed. But there are other types of more specialized IP that don’t fall into the basic categories. Today, those types, which are “neither fish nor fowl” will be discussed.

There is no question that large artificial intelligence (AI) solutions to solve the numerous efficiency and quality needs in the intellectual property (IP)/intellectual asset management (IAM) space will fail. This has been seen with companies that have tried to bring in a generalized AI engine to solve a specific need. The reason for this is clear now, and becoming clearer every day. AI is coming into our IP/IAM space as an application (app) store type business model.

This post is the first in a series talking about the basics of intellectual property. Intellectual property, specifically, consists of those rights associated with knowledge and creation, not land and buildings (real property) or physical things (personal property/chattel). In this first post, the various types of intellectual property will be discussed.

In the previous article, we discussed the recent development of the IP environment in China. Newly strengthened protection of intellectual property rights from the Chinese side indicates lower risk, which will likely encourage foreign investors to enter the Chinese market. On the other hand, there are also incentive programs in the US that support companies in IP-intensive industries on research and development. US companies find themselves holding a strong R&D presence in China due to the size of the Chinese market and the overall strategy to integrate local talents into their R&D operations. The High and New Technology Enterprise (HNTE) program and The Technology Advanced Service Enterprise (TASE) program, funded by the US China Business Council, are perfect examples of programs that promote innovation in US enterprises. With a stronger IP management portfolio, a company can prove itself a contender for innovation and qualify for the HNTE or TASE status.

In a previous post, the question of legal changes necessary for artificial intelligence (AI) to invent was discussed. But what about practical changes? How will AI change inventing in a world in which its inventions are granted patent protection?

With one of the world’s fastest growing economies, China continues to develop its IP environment. As mentioned in the previous article China and the next Great Wall, China has already entered a transitional period away from seeking GDP growth by capital investments and imported technology diffusion toward promoting innovations from within. In this chapter and the upcoming second installment of a two-part article, we will discuss the recent developments in intellectual property rights in China and their efforts in building self-sustaining IP strategies. Further, we will analyze the opportunities and challenges for US firms with an aspect of international business development in this new era of IP development.

New technology brings exciting opportunities for early innovators, and potentially disastrous disruptions to the status quo. Blockchain, a growing, publicly-distributed ledger of transaction data and cryptographic hashes that famously enables cryptocurrencies like Bitcoin, Ethereum, LiteCoin and Ripple, may be one such technology.

It has been obvious for a while now that artificial intelligence is not only going to assist inventors with more robust research and analysis tools, but will soon be inventing on a large scale itself. However, currently patent law does not recognize non-humans as inventors. This will slow down innovation and is an ultimately futile task. Therefore, the law should be changed to allow AI to be recognized as an inventor.

How can tax accountants, wealth managers, M&A brokers, and business owners extract the most value from personal goodwill? Tax court decisions (Bross Trucking, Inc., T.C. Memo. 2014-107, and Estate of Adell, T.C. Memo. 2014-155) have demonstrated that sale of personal goodwill as a distinct asset, separate from corporate goodwill, can provide significant tax advantages for individuals. However, the decisions also illustrate the need for a robust set of justification for the value of personal goodwill in order to withstand challenges.

In this whitepaper, Adam discusses how companies (and countries) with unique, intangible assets and associated capabilities capture more of the value that they create from innovation activities (and remain competitive).

On May 9-11, ipCapital Group held its 14th Annual Thought Leadership Conference. This year’s theme was The RenAIssance of IP. The conference was filled with provocative discussions revolving around hot topics in intellectual property (IP). Following the full day conference, an Artificial Intelligence (AI) IP Tools Workshop was held, during which two highly regarded AI startups presented demos.

John Cronin, Managing Director and Chairman, and Jacob Rosen, Chief Executive Officer and Matt Osman, Chief Technology Officer of Legit are co-authors of "Artificial Intelligence and the Future of Invention Disclosures". Intro: Artificial Intelligence (AI), when implemented correctly, uses humans’ biggest weakness to its advantage: the management and analysis of huge quantities of data. Confronted with several million documents all containing different information, a legal practitioner's first goal will be to reduce that to a reasonable level. That is often what previous workflow technology has been previously used for, particularly in the legal realm. Document management systems filter by date, author and keywords, RSS feeds show only news stories pertaining to an attorney’s current cases and even the “find” function on PDFs documents help you ignore most of the target document. The performance of these tools does not improve when the amount of data it is tasked with handling increases, in fact in most cases it declines.

Artificial Intelligence is no longer the stuff of science fiction. It's being used in a wide variety of industries to drive innovation and efficiency. In fact, Microsoft has just identified AI as a top priority and expects it to drive business in the future. In the world of Prior Art Searching, the industry is just beginning to move past keyword searching and semantic processing tools. Here at ipCG we recently began utilizing AI to improve the quality and relevance of search results that support FTO Opinions and Market Clearance Reports.

On Thursday May 11th, ipCapital Group held its 13th Annual Thought Leadership Conference, bringing together innovation and intellectual property (IP) leaders from around the world in the picturesque Essex Resort & Spa in Northwest Vermont. This year’s conference theme was Effective Innovation - Transforming Ideas into High-Value IP.

In this whitepaper, Adam discusses how VC investments can improve monetization options and mitigate risk when diligence considers IP assets from a holistic business perspective, beyond the traditional legal opinions.

When developing a new idea, you could take the short route and create a “paper only” concept. This approach may be sufficient if you only intend to develop a concept for future rights, or to gain an IP foothold in a market or industry, and not an actual product or service. But if you are developing a new product or service idea and your plan is to take it to market in the immediate or near future, creating a working prototype can be a crucial step in enhancing the value of the IP and product you are developing around the concept and growing its potential value in the market.

A number of acquisitions have appeared in the food and beverage industry in the past several years, including Kraft and Heinz, JAB Holding and Keurig, and most recently the thwarted acquisition of Unilever by Kraft Heinz. Companies would be wise to not only assess the business landscape of potential consolidation in the industry, but consider the IP landscape and patent owner shifts if more of the largest food & beverage corporations merge.

In our second installment of The Internet of Things (IoT), Data, and the Implications for Intellectual Property, we discussed the relationship of data and IoT devices. In this final installment, let's look ahead to the potential future of IoT.

The number of companies that are actively seeking IP protection in this area has rapidly increased. A chart created with ipCapital Group's patent research software, ipCG Innovation Integrator, demonstrates that from 2007 and 2016, there was a 1300% increase in patents related to the IoT.

China's history of largely ignoring foreign patents is changing quickly as their largest technology companies look for meaningful IP protections for their innovations. China seems to be well underway in the development of a solid IP national system for protection of IP rights. R&D investment and new regulations for equity investments spark innovation, while stronger patent laws and more fair litigation demonstrate the country's approach to IP protection.

Verizon was recently informed by Yahoo, a company they inked a $4.8 billion purchase of back in July, that in 2014, Yahoo's servers were hacked and over 500 million Yahoo user accounts loaded with personal data were stolen. Now, various reports in the news are suggesting Verizon is going to ask for a $1 billion reduction in the price of the deal. It is in a business's own best interest to handle this data as it would any other intellectual property, i.e., as a very valuable asset.

The discussions surrounding the dependence of society on technology are well worn. We all know technology and the communication revolution that it has enabled are both powerful forces that are here to stay, creating many new and exciting business opportunities. The rapid rise of technology, however, has also created new business risks.

Intellectual property is big part of a company's valuation, so it is with some interest here at ipCapital Group that we look at any large corporate sale. Such events help us to fine-tune our own equations and provide mountains of useful data for creating such valuations for our clients. So when Verizon buys Yahoo for $4.8 Billion dollars and that doesn't include their patent portfolio, it's interesting to take a look at what they are getting.

In our first installment of The Internet of Things (IoT), Data, and the Implications on Intellectual Property, we discussed the need to understand the full landscape of IoT, not just devices. In this second part, let's talk about "big data". All of these devices and the data they will create, hold, transmit and interact with raises a unique Intellectual Property (IP) question. Who owns the data?

The Defend Trade Secrets Act (DTSA) of 2016 was signed into law on May 11th, adding national and international protection for trade secrets to the already-existing state-level laws, which are allowed to remain in place according to the new federal statute. The DTSA taken together with the AIA’s prior use protections, provides 2-part protection, which may allow a company to continue to use its trade secreted inventions even if another entity subsequently patents the invention. This new paradigm is a game-changer for IP strategy - especially for defense, as it adds another route for IP protection outside the usual "race to the patent office".

ipCapital Group recently had the privilege of attending the 2016 BIOMEDevice Boston conference. Although the array of gears, wheels, pumps, membranes, molds, tubes and tools we witnessed was impressive, from our view, it was the data that stole the show. The Biomedical Innovation series of presentations focused heavily on the quest to collect, store and (somehow) utilize data, and made it clear that data is driving the cutting edge of the medical device industry. Three main themes emerged:

Data is creating patient expectations;

The gap between behavioral data and diagnostic data must be bridged; and

Since Yahoo launched the sale of its core business and patent portfolio in February, questions have been raised regarding the value of non-operating assets. With estimates ranging from $1B to $4B for the patents alone, many are left to wonder how to value a portfolio of roughly 6,000 patents encompassing a wide variety of technologies.

As innovation consultants, we have a front row seat to watch (and help) companies learn how to be innovative. We've seen a lot of companies take a variety of approaches to innovation. One of the most common we see is what we call the "ad hoc" approach. This is a fancy way of saying "let's invent something and then see if we can sell it!" Although this approach is very common, it very rarely works well. We have a better approach. See how we helped a company in the health care industry apply four fundamental ingredients for a successful innovation strategy.

The electrical energy delivery system, the Grid, looks today very much like it has for the past century. However, over the past two decades, customer demand for grid performance has driven the development of new technology. The Grid is transforming from a one-way flow of energy into a Smart Grid that allows for the two-way flow of both energy and data back and forth between all nodes. Some expect that over $20B dollars will be spent annually over the next 20 years to effect this transformation. To take advantage of these opportunities, innovation is needed, and it is needed now.

To say that the healthcare industry is under intense pressure to change is an obvious understatement. But in a large and mature industry how do we begin to understand the scope and scale of the change needed? Working with our clients, and a review of the literature has made it clear that there are three broad areas that can provide a framework for change.

All companies are walking a fine line as they merge and innovate in smart wearables. The open spaces are quickly filling up. Proper care has to be taken to guard the innovation process to maintain an open space for the newest smart wearables to flourish. Any company, large or small, should be alert and constantly innovating to keep a competitive edge when addressing this market.

While the Internet of Things (IoT) is not new, we are now seeing the refinement of the devices, communication protocols, and data management that was not possible a few years ago. There is a forthcoming convergence of multiple product and technology spaces in this this new world of a predicted 50 billion "things," and the possibility for growth in markets and IP are enormous. IoT is a wide-ranging technological space. So we are publishing a short series on IoT and intellectual property (IP) to highlight some opportunities and challenges that we see, beyond the standard scope of everyday articles being circulated.

One of the complex problems that we have been focusing on recently is how to make innovation more successful. We measure innovation success as a combination of both the number of new innovations and the rate of successful implementation. Innovation without implementation serves neither a company nor its customers. From our work with clients we have concluded that there are four major elements necessary to have any chance of creating focused, implementable innovation that meets your business needs: The Four Pillars.

Traditionally, knowledge was viewed in India as something that is created and put in the public domain. However, this does not fit with the global understanding of strongly protected IPR. Hence, there is a need to show the value of transforming knowledge into IP assets.

In this whitepaper, Adam outlines the changing customer and competitor landscapes facing today’s banking industry and argues that developing a thoughtful innovation strategy, considering changes with both customer needs and competition, is necessary to maintain profitability.

For more than a decade, firms have focused much of their "open innovation" (OI) efforts on one direction - inbound OI. The push has been fueled in part by a wealth of scholarly articles and disclosures by the likes of Procter & Gamble about accessing the marketplace of outside ideas. The outbound direction of OI, while arguably less intuitive, offers a number of opportunities for firms to capture value from either internally generated or acquired innovation.

The Apple Watch is, as usual for Apple, a trailblazing product that not only showcases a new product, but opens up a path to grow a new area of technology. It is also another example of true innovation struggling against internal and external forces, all of which try to hamper innovation, harming sales and damaging the development of exciting technology. As with other examples, the Watch is proof that process is just as important as the innovation when it comes to implementing great ideas.

Avoiding IP roadblocks and exploiting gaps in the competition's IP position is a key to developing an intellectual property strategy for new product development. Find out why it’s best to start with the end in mind by looking for potential IP roadblocks up-front that may impact product release.

What is really required to make a significant change to the overall cost of healthcare delivery and its associated industry of health insurance? The answer is innovation, both in how people are cared for and how they pay for it.

Innovation capabilities, from understanding customers to commercializing new products, determine financial success for nearly all firms in today's economy. By building a capability to manage IP, a firm maximizes the potential for a lasting return on innovation.

Based on recent trends, we expect an increase in strategic focus on design patents, which will likely include an influx of new design applications into the U.S. Patent & Trademark Office (USPTO), as well as other patent offices around the world. Here are the key reasons why we are advising our clients to increase their focus on design patents.

The Walt Disney Company was recently awarded a number of issued patents for future unmanned aerial vehicle (UAV or UAS or drone) integration into its aerial shows. By patent protecting this technology and technology application, Disney may keep competitors (e.g., Universal Studios) aerial display shows "on the ground".

It's a bleak geography for many of the top corporations. The top companies in the mobile advertising space, with the exception of Google and Yahoo, even come close to being the top patent holders in the sector.

Valuable IP will define an upcoming chapter in China’s growth story. China recognizes that innovation is an imperative for its long-term economic growth. Less discussed amongst the country’s initiatives to promote innovation is the fact that China’s national system for protecting IP rights continues to strengthen. The rapid evolution of China’s IP system requires emergent IP strategies from all domestic and foreign firms.

The recent decision in the Alice v. CLS Bank case (Alice) has had a profound impact on patent litigation and prosecution, but what impact has it had on IP strategies? Many of our clients are wondering how this legal decision impacts them strategically.

Final implementation of the AIA has changed the race track substantially. Companies will have to adjust in order to win the new race to the patent office. ipCG’s cutting-edge ipAIASM services are designed to let our clients dramatically shorten the time between conceiving an invention and filing the patent application. A client company will run—not walk—to the patent office.

In our October 15th blog post Don't Forget About the "Rembrandt in the Attic"?, we discussed how a failure to think strategically about IP may have been a overlooked factor in the financial collapse of Digital Domain Media Group (DDMG). DDMG as debtor in possession has now sought court approval to sell the 3D patents along with the company’s remaining assets. The assets will be auctioned in separate groups, with the six granted 3D patents and two applications sold as one group. For any parties considering making a bid for the 3D patents, one essential question must be asked: how much are these patents worth?

The recently concluded and highly publicized patent infringement trial between Apple and Samsung was significant because design patents have long been seen as less valuable and less strategic than utility patents. In reality, design patents do have strategic value, especially when used within the context of an overall IP strategy.

Over the past year, ipCapital Group has seen a dramatic increase in requests to value IP portfolios. The engagements range from advising on high-profile deals to supporting capital raises for small, private companies who have few assets other than IP. We continue to use these experiences and lessons as feedback to our methodology, which is critical as the landscape evolves. In our latest video, we highlight a few of those lessons.

The case of DDMG is not unique; IP mismanagement is pervasive throughout the media and entertainment industry. For a number of reasons, companies often fail to recognize the value of their intellectual assets, and the business continues to move forward while the IP strategy does not. When companies start to consider IP in the face of a crisis, be it bankruptcy or an infringement lawsuit, it is too late to go back and reap the benefit of their creative thinking and innovation.

In February, Alcatel Lucent (ALU) initiated a corporate restructuring that included plans to license almost 9,000 U.S. patents. The license project was recently cancelled, because the assets have generated no cash over the past seven months. So, what’s next? Maybe an auction? If the quality and strength of these patents matches or exceeds competitor portfolios, then maybe now is the right time to establish a long equity position.

For patents specifically, the best IP strategy for China balances the use of both Utility Model and Invention patents. For a comprehensive IP strategy, foreign companies should not just look at the term of protection and assume that Invention patents offer all the protection they need. Companies should use the full range of IP protections including not just patents but also trade secrets and know-how, black boxes, and defensive publications.

3D printing is one emerging technology field with the potential to create significant—perhaps even extreme—practical and legal consequences. Innovators and manufacturers need to be ready to use all the protections offered by the different forms of intellectual property to protect their assets and businesses.

The rise in the prevalence of technology and patent filings in the car rental industry is creating the possibility of an industry disruption due to intellectual property. Car rental companies that acknowledge and prepare for the increasing importance of IP will stand to benefit, while companies that ignore the importance of IP will suffer.

As the commencement date of the UK Patent Box initiative approaches (April 2013), eligible businesses need to begin thinking about what their current baseline looks like in regards to their existing IP portfolio. By establishing an initial patent to product mapping inventory and setting up a formal process for ongoing management, businesses can maximize the near and long term benefits of the Patent Box initiative.

This final article in a series of five on barriers to innovation and IP creation explores ideas for overcoming having no resources or budget. Learn how an effective “ROI story,” communicated to executives, can help you obtain dedicated budget to invest in staff, infrastructure, and tools needed to drive your innovation and IP initiatives.

The Patent Box initiative is an exciting offering for businesses operating in the UK; one that can provide significant long term technical, business, and financial value. By considering the implications of the Patent Box program now, businesses will be able to put in place the necessary processes to measure, communicate, and build a sustainable IP program supportive of this initiative.

Inorganic growth strategies through M&A don’t always account for the potential of intangible assets. M&A teams that consider IP and other intangible assets both before and after a deal can improve success with more accurate pricing and more efficient value extraction.

Making the decision to invest in patented technology requires a manager to map and evaluate a series of decisions and uncertainties. Real options pricing can enhance IP valuations in situations where key assumptions regarding market, financial, and technology variables are identified and estimated with reasonable accuracy. When coupled with the income and other valuation approaches, such as comparable market transactions, options thinking can guide financial and strategic decision making.

Having a dedicated innovation or IP leader responsible for managing execution according to a documented process is essential for putting strategy into action. But even a well-defined strategy and process and won’t run itself. People make the strategy go. So, how can you help your organization motivate action by the teams and individuals needed to achieve your innovation and IP goals? How can you incentivize value creation?

Last week, Microsoft paid $1.06B to purchase and license about 1,100 AOL patents. Putting the issues of purchase premium and strategy aside for another discussion, this transaction presents an interesting case on IP value expectations and communications.

Great innovation is not just about great ideas. To get new ideas off the ground, you need executive buy-in and funding. You can increase the likelihood of success by building the executive buy-in for the innovation process, and by knowing what the CEO and other stakeholders are seeking in order to approve and fund your ideas. Here's how you can find great new ideas and establish rigor in the process that will win support and funding.

Companies buy and sell intellectual property (IP), including patented technology, in all industries, ranging from high-tech products like semiconductors to relatively lower-tech products like non-durable consumer goods. Businesses can take advantage of these often fast-moving opportunities if they have the appropriate IP valuation tools. These tools are particularly important whenmarket and technology uncertainties are highandmanagers need to model different market scenarios.

SOPA, PIPA, RIAA, MPAA. In certain corners of the Internet, these are not just 4-letter acronyms, but 4-letter words. What is most striking about the conflict over digital piracy is the incredible level of hostility the copyright holders and their defenders, including the Recording Industry Association of America and Motion Picture Association of America, have generated. Patent holders and their defenders should take note: you are next.

Serco, a FTSE-100 outsourcing company based in the UK, operates contact centers for a large, FTSE 100 broadband provider, who was seeking to raise the level of performance for customer service. ipCG's innovation process was used to discover and prioritize 300 innovation ideas toward this objective. Just three months after the process began, Serco's performance on handling customer complaints moved to the top of the client's supplier performance table.

Strategy is only as valuable as your ability to execute - an imperfect strategy that is well executed will generate much higher returns than a glossy white paper strategy that is poorly executed. So, how can you help your organization turn innovation and IP strategy into business value? This third article in a series of five on this subject explores ideas for overcoming the barrier of having no defined process.

Looking back on 2011, we've pulled together the top five most read articles from the ipCG blog during the year. While we covered many topics, including a series on IP strategy execution, open innovation, and the impact of new patent legislations, the topics of most interest to readers were IAM best practices for SMEs, understanding patent valuation, and filing strategies for design patents and China.

Establishing a clear direction for innovation and IP creation starts with consensus on an overall corporate strategy that defines the vision, specific business goals, and tactical actions that serve the vision and goals. Unfortunately, Executive and Board level consensus on the strategy is not enough.

Over the past two years, ipCG completed several IP valuations in the IT industry. In most cases, our clients contracted the models for external purposes - to estimate IP value for M&A negotiations. However, work products generated significant internal benefits as well. We share this case study with you to demonstrate the many strategic and managerial insights that can be gleaned from thoughtful IP valuations.

No new typewriters will be produced in 2012. The last production line closed down just this past year. On the one hand, this shows quite poignantly why innovation is important, on the other hand, it shows that destructive innovation is not something that happens in a flash. So, how do you know if your product is a typewriter? Do you have a plan?

The 25% rule is a rule of thumb used to estimate royalty rates for intellectual property (IP) licensing transactions by approximating the risk/reward relationship between a licensee and licensor. A licensee only pays a portion of profits to the licensor, because of the additional costs and uncertainties that it incurs to convert the technology in to revenue.

SMEs are often in a risky position of not having access to professional advice or formal training about intellectual property (IP), and therefore can unknowingly handicap themselves in whether or how they use IP. As a starting point, here are the 10 things every SME should know about IP.

The innovation and IP leader who is able to overcome the barriers has an opportunity to advance the company's competitive position with better products and services, faster time to market, more efficient operations, stronger IP, and the resilience necessary to respond to rapidly changing market conditions and critical business problems.

The Leahy-Smith America Invents Act (AIA) recently signed into law by president Obama represents the most substantial modification to the U.S. patent system in the past fifty years, and most notably, changes the U.S. system from a "first to invent" to a "first to file" system. These new rules will undoubtedly cause companies to re-think their intellectual property (IP) strategy and re-tool their IP process.

ipCapital Group is pleased to announce the addition of Chris Huffines to our team. Chris works primarily with ipCG strategic partners on projects such as technical patent mapping and prior art analysis. He is especially active in the areas of telecom analysis and in reviewing the changes to the patent system stemming from the America Invents Act.

Business strategy boils down to choices, with the ultimate goal of maximizing firm profits. The firm plans its activities, e.g. operations, marketing, finance, R&D, to support its business strategy. However, few firms use IP strategically by aligning IP activities with their business goals.

In formulating its business strategy, a firm analyzes both its external environment and its internal composition. Externally, the firm studies the structure of the industry in which it competes, identifies market opportunities and threats, and researches social, political, technical, and economic trends.

Whether used simply for enhancement of brand, developed and sold as a new product, or licensed to film industry companies or studios, Hollywood inventions are being missed. These missed inventions are wasted opportunities for studios and companies involved to increase their revenue based on creative thinking - ironically, the lifeblood of the film industry.

In the September issue of Intellectual Property Magazine, Kate Shore discusses how to address IP issues before the relationship to help create a culture of co-invention and collaboration, how to rev up your innovation engine to generate many potential inventions, and ways to maximize the value of the inventions created for both parties.

If your R&D department is like most, you have very creative people working diligently to solve problems. However, you may wonder why you don't see more invention disclosures coming from such bright, creative people.

Risk factoring is critical to developing valuation models that work. By investing the time needed to develop thorough and effective risk adjusted valuation models, you significantly increase the potential that you will actually achieve the projected return on investment for your technology acquisition and make better, more informed business decisions.

Comparables are vital to determining what the market would likely pay for a company, technology, or Intellectual Property (IP) asset. While the market value is not necessarily what the asset is worth to your company, it gives you an idea of what competitors may be willing to pay and can provide insight that will inform your bidding strategy.

A Triangulation Approach to valuation looks at value in three ways: 1) modeling the value that the technology and IP provides for your company's intended use; 2) reviewing, risk-adjusting and use-adjusting the target's valuation, and 3) understanding market comparables.

As has been shown, ICM processes are needed to successfully execute the IP strategy. If a company does not have all the processes needed, or needs to improve their processes they typically call upon outside experts in the field to help. This can be very helpful by comparing with best practices in the industry.

Organizations that do not use the IP strategy reviewing process generally file patent applications on everything that is deemed patentable coming from the R&D staff. There is no one "minding the store" to ensure that the IP strategy is followed. This is a very expensive way to create a low-value patent portfolio!

Documenting is an important step on the path to successful execution of IP strategy, however inventors are often more interested in solving technical problems and inventing than in documenting their inventions.

Facilitating invention, acquiring technology and IP from outside the company, and inventing around patents are key processes for creating and acquiring IP. Many companies have adopted the best practices of conducting proactive invention extraction sessions and directed invention brainstorming.

The first step in implementing IP strategy is to thoroughly evaluate which processes you have that are working well and which processes are absent or are not yielding the desired results. It is important for a company to consider the best practices used by other IP leaders, both inside the company's industry as well as in other industries.

Imagine this scenario: You spend the tens of thousands of dollars to bring a product to market, and patent-protect it. Within days of your product's release, the device has been scanned (via a 3D printer add-on that cost only $200), its dimensions transformed into computer code, and that code transmitted across the globe via the internet. Thousands of people with 3D printers can then take this pirated information and create exact copies of your device in their homes.

The newly published USPTO 2010-2015 Strategic Plan is the first strategic document from the USPTO that demonstrates that someone who has used IP as a global business asset is in charge! No wonder, as the new Director of the USPTO, David Kappos, comes with 20 years of experience managing IP at IBM.

False patent marking has become a hot topic recently as case law around patent marking on products and recent legal developments have created a lucrative opportunity with very low barriers to entry. More than 100 cases have been filed so far in 2010 and new cases are being filed daily. ipCG has some suggestions on how your company might respond.

Design patents are a form of IP that should be considered by all industries as their strategic use, in conjunction with utility patents and other forms of IP, can strengthen and enhance the value of a company's IP portfolio and brand.

Good preparation for a patent search can lead to successful and effective patent analysis, whereas the lack of preparation can lead to the disappointed stakeholders, missed IP opportunities, or wasted time.

Intellectual property (IP), such as a patent portfolio, is a critical intangible asset for innovative companies. However, IP presents management and communication challenges because few companies catalog their IP strategically or link its development to value creation, i.e. increased revenues or decreased costs.

Whether a company uses its IP offensively or defensively, a company's investment in IP strategy can be implemented cost-effectively in both the short and long term. Four practices to consider are: an IP portfolio audit, strategic foreign filings, defensive publications, and strategic portfolio development.

"It is only a matter of time before the integration of IP and product development becomes part of the mainstream business process. Companies have to decide whether they want to be leaders or laggards as this happens." John Cronin, Managing Director & Chairman of ipCG, and Brad Goldense President and CEO of Goldense Group, Inc. are the authors of "Integral IAM and new product processes are the future," published in the November/December 2009 issue of IAM Magazine. Their article stresses the importance of becoming an early adopter to the growing trend of merging intellectual property and business goals.

ipCG is pleased to announce the release of its first iPhoneTM application,
the Ah Ha!TM Discovery Deck, which is an electronic version of a brainstorming
and creativity tool that ipCG has been using for years with clients.

If you expect mobile applications will become an established channel of communication for your business, you should consider implementing a formal strategy to guide the development process, from generation ideas to prototype creation to selection of best mode of IP protection.

Small companies can face large financial hurdles on the way to securing intellectual property (IP) protection, particularly with patents. Accumulated patent lifecycle costs can exceed $125,000 for one US & one PCT filing. This cost may include prior art searching, patent drafting, patent prosecution, and maintenance fees.

IP valuation is complicated by a host of factors, such as accessing market comparables, determining IP risk, handicapping potential licensees, and calculating the uncertain economic benefits to be generated by IP assets. While many sources enumerate methods of IP valuation, few provide real-life applications or guidelines.

Telecom companies large and small will reduce costs by out-sourcing more processes, reducing headcount, and generally reaffirming focus on core markets and technologies. The cost-cutting conversation for many will eventually turn to intellectual property (IP), and rightly so. There is opportunity for many thousands or millions of dollars in value creation by reducing costs and increasing revenue through strategic management of IP.

The development and management of IP is an art, not a science. Of all corporate job functions, only IP attorneys receive formal training related to IP, but just related to the legal side of intellectual property. More comprehensive training is needed...

All companies are susceptible to disruption - across all industries, at every scale, and in both strong and weak players. IP plays a key role in disruption - it is both a means for identifying it and protection against it. Make sure that you are ready when disruption comes galloping your way!

Innovation is the lifeblood of consumer products companies, as they strive to stay ahead of competitors, respond to evolving customer needs, and manage other market pressures. Products typically have short timelines for development, design, and marketing and high corporate expectations for sales. Getting products to the market is just the first step in a long process.

Any company that files patents as part of its intellectual property (IP) strategy should be actively thinking about the end use of these assets. In order to maximize business leverage, a patent holder must be able to demonstrate that a third party is using or may have a desire to use the patented invention.

Is your company planning to layoff employees in response to a tougher economic environment? Do you have a process for preventing valuable intellectual assets from walking out the door along with your exiting employees?

A valuation of a company's patent portfolio or of a specific group of patents is important in helping the company to determine the value of its portfolio in a licensing transaction or in the sale of the company. It is important for companies to understand the drivers of value within their portfolios and to understand the strengths and weaknesses of the portfolios.

Companies engage in strategic planning to lay out a path to success in various areas of business. In strategic planning, achievement of milestones and progress toward goals are assessed using a variety of metrics, both quantitative and qualitative. A refined set of those metrics may be designated for use as key performance indicators (KPIs).

There is a lot in the news about IP piracy and counterfeiting in China. This may cause you to be indecisive about whether or not it is important to file patents there. It is also very clear from the numerous analytics work we have done in almost every industry that only a handful of companies have a clear filing strategy. Many of our clients ask us what they should do.

In a recent article, "Is
the recession suffocating American Innovation?," Deb Riechmann of
the Associated Press describes some trends that may be negatively impacting
the success of innovation in the US. There has been a decline in the new patent
applications at the US Patent and Trademark Office because some companies...

The telecommunications industry continues to evolve. Competitive threats come from the least likely sources. Technology continues to create new business models and disrupt the old. Network convergence may shift the balance of power.

In Vijay Govindarajan's blog, "Strategy and Innovation,"
his April
12th entry responds to a recent BusinessWeek article, "Is
Innovation Too Costly in Hard Times?" From the article, IBM Chief Executive Samuel Palmisano, states, "Some
may be tempted to hunker down, to scale back their investment in innovation.
While that might make sense during a cyclical downturn, it's a mistake when
you're going through a major shift in the global economy."

In 1997, a small Texas company called DataTreasury invented and patented a novel technology to electronically capture and store checks. More than 10 years later, after post-September 11th laws were instituted requiring banks to be less reliant on paper checks being transported by aircraft, DataTreasury found that its patent was being used by a long list of major American banks.

As the economic downturn forces companies to tighten their collective belts, one strategy they cannot afford to abandon is strategic management of intellectual property (IP) through patents - one of the most powerful methods of protecting competitive advantages.

In today's competitive marketplace, companies cannot miss any opportunity to strengthen, improve, and protect their brands. They have to look beyond traditional strategies of securing trademarks, copyrighting text, and protecting designs.